Egypt’s Central Bank to Consider Issuing Cryptocurrency

The Central Bank of Egypt (CBE) has revealed it is carrying out studies around cryptocurrency and is open to the possibility of issuing its own tokens – a digital version of the Egyptian pound.

Speaking at a conference in Abu Dhabi, the CBE sub-governor, Ayman Hussein says the bank is conducting research in partnership with a number of international financial institutions in a bid to develop a reliable framework on how to issue digital currencies.

The sub-governor who termed the process an ‘ongoing feasibility study’ states that the results could lead to the issuance of an Egyptian pound-based cryptocurrency. Mr Hussein however did not disclose if this cryptocurrency would be bank-to-bank as in the case of the UAE and Saudi Arabia or between banks and their respective customers.

Citing numerous benefits of digital currency, Hussein laid emphasis on crypto’s advantage of ‘lowering the cost of banknotes issuance and use of cash’.

It would be noted that Egypt’s fintech market has been described as an emerging market with huge tendencies towards the adoption of a cashless society; just as the country continues to review its economic reforms in line with globally emerging financial standards and technologies.

Egypt’s Crypto Story

This latest affirmation comes as a surprise, the Central Bank of Egypt had in January warned its nationals against dealing in Bitcoin; this warning followed its denial of acceptance on the launch of Bitcoin Egypt, the country’s first crypto exchange in August 2017.

Also, the CBE’s notice was hinged on Islamic religious teachings; with the country predominantly Muslim, some clerics viewed Bitcoin and cryptocurrencies as Haram (which means Forbidden in Islamic Law, this they argued is based on crypto’s speculative nature and lack of physically dignifying activity). However, recent studies and clarifications have cleared the air on this, although some activities like ‘leverage trading’ are still being partly debated.

Analysts in some quarters view this present change of stance and increased interest as a product of the activities of its fellow Islamic nations like the UAE. The UAE has notably been involved in policies and moves around cryptocurrency and blockchain technology with its most relateable development being the probable issuance of a Sharia-compliant cryptocurrency and deployment of a Sharia-compliant bond transaction on the blockchain.

Additionally, UAE and Saudi Arabia had last week through their respective apex banks, announced a collaboration billed for 2019 towards the development of a cross-border cryptocurrency, strictly suited for use in inter-bank transactions and only between both countries.

What are your thoughts on this? Would African nations and Central Banks move towards this trend?